Montenegro: Tax debt payment plan introduced in Montenegro

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Ivan Petrovic

Montenegro's Ministry of Finance and Tax Administration have
created a new incentive in the tax system for companies with
tax debt.

The programme will facilitate the payment of debt related to
corporate income tax, personal income tax, social
contributions, VAT and tax on real estate.

The relevant law, concluded on December 31 2016, provides
the ability to pay tax debts in up to 60 instalments, with the
requirement that the first payment amounts to 10% of the total
debt. A very important aspect of the Act is that the dynamics
of settling the tax debt (basically the number of monthly
instalments) is proposed by the taxpayer.

The interest due for the debt and the costs of the procedure
will be written-off for all taxable persons who will repay
their debts in this manner. Subsequently, the reported
liabilities will be taken in account as ongoing debt.

The Ministry of Finance will announce a public invitation in
relation to the programme, available until March 31 2017. The
deadline for submitting applications will be the 45th day after
publishing the public invitation.

Applications need to include the taxpayer's name,
registration number, address and the proposal of the payment
method for the tax obligations. The tax administration will
have a 60 day timeframe to respond to applications. Following
acceptance, the first payment will need to be completed within
90 days.

A minimum threshold of tax debt is set for companies to be
eligible for the instalments payment programme. Companies with
up to five employees have a threshold of €100 in debt,
while companies with the number of employees ranging from six
to 50 must have a tax debt exceeding €500 in order to be
considered. For larger companies with more than 50 employees,
the threshold has been set at €1,000.

The tax administration has invited all taxpayers who have
reported tax debt to respond to the public invitation and to
use this opportunity to repay tax debts instalments, with the
write-off of interest and litigation costs in connection with
the tax claim.